Mortgage lending rose in Asia by £4.9bn ($6bn) and in HSBC UK by £4.1bn ($5bn) in the nine months to 30 September.
In personal banking, global revenue of £12.7bn ($15.5bn) was up 43 per cent. Net interest income was £3.8bn ($4.6bn) or 47 per cent higher due to wider margins from interest rate rises. This was supported by lending growth in HSBC UK, and in Asia, Mexico and the US.
HSBC’s net interest rate margin, a crucial measure of lending profitability, fell to 1.7 per cent, down two basis points from the previous quarter. The bank confirmed this was due to customers locking cash away in higher interest rate paying deposit accounts and outlined the peak in interest rate rises.
HSBC UK Bank PLC, the global giant’s second most profitable country reported profits of £5.4bn ($6569m), a substantial increase on £2.8bn ($3,347m) at this point in 2022.
In Asia and the UK, mortgage lending balances grew by a combined £9.06bn ($11bn) against Q3 2022. In wholesale transaction banking, revenue increased by 50 per cent to £16.6bn ($20.2bn), primarily due to growth in net interest income from higher interest rates, it said.
HSBC growth forecasts on the up
HSBC Group GDP growth forecasts improved for most of the major markets during Q3, following better-than-expected growth in the first half of 2023.
The Group said: “In North America and Europe, economic growth has proved more resilient to higher inflation and interest rates than was previously expected. Consumption spending in particular has continued to grow despite the squeeze on real disposable income, while employment demand has also remained strong. Forecasters have raised their near-term growth expectations, and forecast dispersion and other measures of uncertainty have reduced.
“Despite the improvement in short-term forecasts, the outlook is for growth to remain weak as the lagged effects of high inflation and higher interest rates are expected to slow both household demand and business investment, while unemployment is forecast to rise moderately.
“The most significant forecast changes in Q3 were to house price expectations. Across most of our major markets, higher interest rates and the ensuing squeeze on real household incomes have significantly weakened demand, and transaction levels have fallen.”
